Building one’s own home is a dream that everyone sees. We spend years and years earning hard to make this dream true. But to make it practical, one has to work with full zest and zeal to compete with the expenses. Do you think it is impossible owing to high inflation rate? While this may sound complicated to actually construct a house, seeking home loan can be easier if you hold a credit card.
Home loan accessibility is not very challenging, if the borrower is eligible for it. The simple criterion to take this benefit is to Just pay credit card bills in time, means within due date. Not only you earn a credit score against it but also get the interest free loan. Yes! And this is a great benefit for the user.
Why Credit Cards Ease Your Home Loan
It’s a common thinking that using a credit card might put user in whirl of problems, leaving him indebted. Credit cards, now, allows you to have interest free funds for a defined period of time, provided that you have cleared the bill before the due date. Doing so, you will earn a credit score. This score mounts up every time you use credit card and pay before due date. So the intelligent and frequent use of credit card might benefit a user so much so that he can apply for a home loan against it.
Redeem Your Credit Score
Redemption of credit score is really important, after all, you will get the home loan against it. Pay your bills in time and your points are redeemed. But what if you don’t do this! If you fail to pay the bill in time, it not only invites a rise in interest rate but also damages your credit score. Sometimes the debtor pays the minimum due amount, although the banker doesn’t treat you as a default, but this conduct is disliked by the credit card companies. So, for having home loan, buyer must have an earning of credit score more than 750. Timely payments from a buyer will result in piling up your score, on basis of which Home Loans can be applied.
Credit Utilization Ratio
What else you can do for a Home Loan. There’s another way out. To further attract banker for a Home Loan, your credit utilization ration should remain not more than 30%. Although this ratio might fluctuate, but it should not increase consistently. Moreover, higher weightage is given to older credit accounts rather newly accounts. Availing personal loans on credit cards hinder the credit card limit, indirectly obstructing the earning of credit score. So for taking home loan facility, timely payments and minimum use of personal loans is preferred.
Dispute Handling
Any dispute arising out of credit card needs proper attention and zero ignorance because this may affect your credit report history. So in case of such cases, one must ensure that no outstanding amount should be left behind. Frequent users of credit cards must keep in mind that repayment of loans must be done in time to keep the score in upward trend.
These above points will help you to efficiently use your credit card and its related facilities in an efficient way. The smart use of this credit card can ease your daily challenges.
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